Are you a frog, pig, vulture or an ape as a stock market investor?

Types of stock market investors: Each investor category as their own interpretation of the Indian stock market, which in turn reflects in their investment strategy

In a recent tongue-in-cheek report, analysts at Kotak Institutional Equities (KIE) have classified Indian stock market investors into four broad categories – frog, pig, vulture and an ape.

Each investor category, wrote Sanjeev Prasad, co-head at Kotak Institutional Equities (KIE), in a recent note co-authored with Anindya Bhowmik and Sunita Baldawa, has their own interpretation of the Indian stock market, which in turn reflects in their investment strategy.

The markets, which KIE compares to a jungle, has no place for egos (of investors), and the jungle is far bigger than the animals (investors) that live in it.

"The jungle is not a place for egos, and animals in a jungle know that there is only one king of the jungle – the jungle itself," Prasad wrote.

Here are the four main types of investors in the Indian stock market jungle, according to KIE.

Frogs

The 'frogs', according to the KIE report, are having a swell time in the jungle, having discovered a magical pond that keeps replenishing itself. The pond, KIE said, seems to have overheated of late (in terms of overall the market valuation), and is visible in the bubbles in the water.

However, the frogs are oblivious, KIE said, as their bodies have adjusted to the rising temperatures / valuations and they have confidence about the pond cooling itself automatically.

"Some jungle observers blame a monthly plan of the pigs (which KIE believes is the flows via the systematic investment plans, or SIPs) to dump cold, hard stuff in the pond’s water (some technical jungle folks vaguely term it ‘liquidity’) for the anomalous behavior of the frogs (they are not jumping out of the boiling water)," the KIE note said.

Pigs

The pigs, the KIE note said, are having a great time too, as they are smug about the fact that the water in the pond is reaching higher and higher levels (all those bubbles in the water), but remain ignorant about the fact that the temperature of the water (market valuation) has reached extremely high levels.

"In fact, the pond’s water could be at risk of turning into steam and disappearing altogether. However, they (pigs) are too busy rolling in the lucre to pay heed to such a potential calamitous event, as they remain largely ignorant about the rules of the jungle (stock market); massively confident about their ability to siphon off the water from the pool at the right time before other animals and their fellow pigs do the same," the KIE note said.

Vultures

The vultures, however, are those investors who are not having a great time in the stock market and have been equated to foreign investors, who have returned to this particular jungle (the Indian stock market) in the hope of a huge feast (making a quick return in a short time), but have been disappointed so far.

"The pigs continue to frolic and are far from giving up the ghost (their spirits are high, if anything), even as their bodies have gained enormous weight. The vultures, which KIE suggests could be foreign investors, had migrated to other jungles (other equity markets across the globe) a couple of years ago, especially to one across a high and long mountain chain (China). However, that jungle is made for slim pickings, forcing some of them to return to this jungle," the note said.

Apes

Any description of the jungle, the KIE note said, would be incomplete without a discussion on the role of the apes, who sit in their usual arboreal hauteur, rarely descend to the floor of the jungle and drop overripe fruit periodically for other animals in the jungle. An ape, it seems, would equate to the role of unregulated stock advisors.

"Other animals have learned to ignore these droppings, which has spurred the apes into fighting for existential relevance. Their chattering and nattering have reached unprecedented levels of late, and they have started to speak some unrecognizable language (it sounds like English but has only superlatives and no facts, figures and numbers). It seems like a new form of monkey business," the KIE note said.